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Nielsen to Buy Arbitron for $1.26 Billion

Media research giant makes a play into the radio measurement business.

Nielsen said Tuesday that it plans to buy Arbitron in a deal valued at about $1.26 billion.

The acquisition would give Nielsen, the largest media research firm in the world, reach into the world of radio measurement. Arbitron has long been the leader in that sector, with a strong footprint inside the U.S. radio market.

In announcing the deal -- which needs to pass regulatory scrutiny -- Nielsen said it would be purchasing all of the outstanding common stock of Arbitron for $48 per share in cash, representing a premium of about 26 percent to Arbitron’s closing price on Dec. 17.

With $422 million in revenue last year, Arbitron is selling its business at three times sales. Nielsen chief executive David Calhoun commented that the acquisition is necessary to grow. Together, Nielsen and Arbitron generated total revenue of $6 billion for the fiscal year ending Sept. 30.

The transaction already has been approved by the boards of both companies.

“U.S. consumers spend almost two hours a day with radio. It is and will continue to be a vibrant and important advertising medium,” said Calhoun. “Arbitron will help Nielsen better solve for unmeasured areas of media consumption, including streaming audio and out-of-home. The high level of engagement with radio and TV among rapidly growing multicultural audiences makes this central to Nielsen’s priorities.”

It's the second big announcement by Nielsen in two days. On Monday, the company said it had reached a multiyear agreement with Twitter to create the Nielsen Twitter TV Rating for the U.S. market. As a result, Nielsen will be pushing into the world of social media, attempting to introduce a standardized metric capturing the reach of the TV conversation on Twitter.

The Arbitron deal is intended to further recognize the inclusive media consumption habits of consumers. Nielsen president Steve Hasker noted thatNielsen will be expanding its audience measurement across screens and forms of listening. “These integrated, innovative capabilities will enable broader measurement of consumer media behavior in more markets around the world," he said.